Eds note: This article has been updated with information about Aurora’s facility location to reflect the company’s most recent news release.

Aurora Cannabis Inc., Aphria Inc. and a joint venture partner of Wayland Group Corp. have been awarded, on a preliminary basis, the first three medical cannabis cultivation licenses in Germany, the companies said on Thursday.

Aurora and Aphria will each be permitted to grow 1,000 kilograms a year in Germany over the next four years, while DEMECAN GmbH, a 50-50 joint venture partner of Wayland, will be allowed to grow 600 kilograms annually for four years.

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The decision from Germany’s Federal Institute for Drugs and Medical Devices (BfArM) has not been finalized, and companies that were not selected have until April 17 to appeal BfArM’s decision. BfArM has not formally released information on the awards.

Germany legalized medical cannabis in early 2017. The country, however, has been slow to allow in-country cultivation, relying instead on imported products, mostly from Canadian LPs. The tender process to award the country’s first cultivation licenses has dragged on for almost two years due to a series of court challenges.

Despite delays, the tender drew considerable interest from Canadian cannabis companies, eager to get a foot in the largest and wealthiest federally legal medical cannabis jurisdiction in the world. Seventy-nine bidders participated in the most recent tender round, according to BfArM.

"The actual lots being asked for initially are fairly small... but this is like being the first licensed in Canada in 2014, it allows you to actually build production there, and that adds to relationships that you're going to build with the regulators and with the physicians," said Cam Battley, Aurora’s chief corporate officer.

Aurora is building an indoor cultivation facility in an industrial park in Leuna, Saxony Anhalt, near Leipzig. Aphria is building an indoor growing facility in Neumünster, and has a distribution centre in Bad Bramstedt. DEMECAN operations will take place in Wayland’s facility near Dresden, according to Wayland’s vice president of communications, Graham Farrell.

The small cultivation lots authorized by the German government are unlikely to meet the rapidly growing demand from medical patients, Mr. Battley said. He estimates there are between 60,000 and 100,000 patients using medical cannabis in Germany.

“Something very important that the German Government said is that this is not going to change the fact that they’re going to be importing cannabis for a very long time,” said Mr. Battley. “The good news there, is they’re required to be EU GMP compliant, and there are only eight production facilities in the world, seven of them in Canada and one in the Netherlands that meet that requirement; we have two of them.”

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The ongoing import opportunity could provide some solace to other large LPs, like Canopy Growth Corp. or Tilray Inc., that appear to have been overlooked by BfArM.

The announcement comes at an interesting moment for Wayland, which is negotiating the sale of 49.99 per cent of its international assets to a company called International Cannabis Corp.

“As per our most recent press release, the due diligence portion of that is still ongoing and nothing has been finalized,” said Mr. Farrell.

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